Building a digital broadcaster with global scale

Jørgen Madsen Lindemann has overseen MTG’s investment in digital companies. He explains why the broadcaster has made such a radical overhaul of its product portfolio.

Not so long ago, Modern Times Group - one of Scandinavia’s largest media companies – was just another traditional broadcasting business, with content and channels, operating reasonably successfully in both the Nordics and in a number of different countries, including operations in Russia, the Baltics, the Czech Republic and Africa.

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But in the last five years the company has undergone nothing short of a sea change in its product portfolio and its ambition, changes that it sees as essential to its future.

MTG Chief Executive Jørgen Madsen Lindemann believes that the future for MTG - and for all legacy media companies and broadcasters - is in embracing new distribution technologies and catering to new audience appetites, particularly of younger viewers.

“The old pay and free TV model is under pressure because there are many other options out there for audiences,” says Lindemann who has worked in various jobs at MTG since 1994.

“The general story-telling for Millennials has changed so we need to be there.”

Since Lindemann became CEO in late 2012, MTG has sold off billions of Swedish kronor worth of traditional TV businesses in countries outside of the Nordics, using the proceeds to buy into digital companies with global scale economics, like eSports, multi-platform YouTube content and gaming.

In 2017, MTG shows all the signs of a huge transformation that has been focused on becoming a leader in what the CEO calls “global scalable digital products”.

It’s a strategy that is beginning to pay off. By the end of this year, MTGX – the digital part of the business that includes the fast-growing eSport business – is forecast to move into its first-ever profit, while the group’s stock price is up 32% in the last 12 months.

“Sometimes you have to take chances,” says Lindemann, something that he has done in his home markets around Scandinavia where MTG’s subscription VOD product ViaPlay is its fastest growing business as well. “We are selling off our traditional and DTH global revenue products and building investments that are global through both organic growth and M&A.”

In the last several months MTG has purchased a majority stake in online games developer Innogames as well as spent $55mn in August to buy US games developer and publisher Kongregate, whose games attract 14mn monthly active users.

MTG is creating YouTube content through its Zoomin TV multichannel network business, which has close to 15,000 channels and 1.2 billion monthly views. Zoomin recently signed a deal with China’s Tencent, the owner of mobile messaging giant WeChat, to make its Gen Z-focused video content available to 1.5bn Chinese viewers across Tencent’s platforms.

“Fibre infrastructure has increased the traditional pay TV market”

MTG also has been actively acquiring Nordic rights to key sport, including Champions League, Europa League and the FA Cup.

MTG also owns 30 video production companies working across 17 countries. Its first original content commission for its ViaPlay service, Swedish Dicks, a comedy series about a Los Angeles-based Swedish private detective and former stuntman which stars Peter Stormare (Fargo), Swedish comedian Johan Glans and Keanu Reeves (The Matrix), has been commissioned for a second season with global distribution rights picked up by Lionsgate Television.

MTG’s eSports business is part of a wider trend that sees video gaming as a boom business: Viewing of eSports rose by 19% in 2016, accounting for six billion hours of viewing, and the eSports video market is expected to reach US$1 billion in advertising revenues by 2020, according to IHS Markit. MTG has deals with Twitter-owned Twitch, among others, and that business segment is set to have 40% sales growth alone in the second half of this year.

While the digital businesses are MTG’s fastest growing, Lindemann says that the more traditional broadcasting business has been able to capitalize on the wide deployment of fibre infrastructure in the Nordics, where, for example, 73% of Swedish homes have access to over 100Mbps internet access.

“The fibre infrastructure has increased the traditional pay TV market with many more opportunities to get into households,” Lindemann explained.

Even with the decline in TV advertising, the decline in DTH viewing and the decline in the hours that people watch traditional TV, MTG’s Nordic TV business saw double digital increases in both revenue (11%) and profit (22%) in the first quarter of this year.

“Many media companies in Europe are sitting tight and they pray and hope that nothing is going to happen,” says Lindemann.

“It is especially true when you are jeopardising your own traditional businesses. But I thought we had more to gain than to lose. I also looked over my shoulder and saw the global guys like Amazon and Netflix and Facebook were bigger so I thought we had better move beyond the Nordic markets.”

Profile

President & CEO, Modern Times Group MTG AB

Region: Sweden

Jørgen Madsen Lindemann was appointed as President and CEO of MTG in September 2012, prior to which he served as Executive Vice President of the Group’s Nordic Broadcasting (free-TV, pay-TV and radio) operations from October 2011.

He was also responsible for the Group’s Czech operations between 2008 and 2011, and the Hungarian operations between 2010 and 2011, and served as CEO of MTG Denmark from 2002, prior to which he was responsible for MTG’s New Media department between 2000 and 2002.

Lindemann has worked in the Group since 1994 when he joined as Head of Interactive Services.

He became Head of Sponsorship for TV3 in 1997, then Head of Viasat Sport in Denmark and, subsequently, Head of Viasat Sport for the Group in 1998. He is also a member of the Boards of Zalando, Turtle Entertainment, The International Emmy Association in New York, and non-profit organisation Reach For Change.

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